Daily Briefing – September 3, 2020

Published on
September 3rd, 2020
45 minutes

Daily Briefing – September 3, 2020

Daily Briefing ·
Featuring Ash Bennington, Roger Hirst, and Dave Floyd

Published on: September 3rd, 2020 • Duration: 45 minutes

Senior editor, Ash Bennington, hosts Dave Floyd, founder of Aspen Trading, to discuss the levels he's looking at after U.S. equity markets cratered today. Dave considers whether there are structural changes occurring in the markets and provides his insight into the frothiness by drawing comparisons between now and markets in the early 2000s. He also breaks down his tactical approach and how he makes his picks. Ash is also joined by Real Vision's Roger Hirst, sharing his thoughts on how rising implied volatility was signaling a potential drawdown in the past few weeks. Roger explains how he analyzes the VIX and the volatility curve to understand this rare market signal and expands on Ed Harrison's points about derivatives playing into rising volatility and what bond yields converging to zero means for real yields. Roger also provides his response to James Altucher’s segment from yesterday's Daily Briefing.



  • JR
    Jeremy R.
    4 September 2020 @ 01:29
    I'd love to hear the "QE is not money printing" team's (Brent Johnson, Jeff Snider, Steve Van Metre) interpretation of Roger's claim @30mins - that while banks don't lend against bank reserves to the "real economy" - they DO make balance sheet space available (against QE created reserves) for hedge funds to lever up against and buy assets.
    • JK
      John K.
      4 September 2020 @ 04:34
      I agree! My initial thoughts are that banks do still have to come up with the capital to actually make the loan and the associated costs with that. I don’t think it effects their deflation narrative at all since lending to Main Street is what drives inflation
    • PW
      Paul W.
      4 September 2020 @ 14:12
      Van Metre never mentioned excess reserves banks hold at the Fed. I need to do more research, but not mentioning them and the issue of the Fed paying interest on excess reserves makes me suspicious. Also, Roger actually worked at a bank and generally knows what he is talking about.
    • JR
      Jeremy R.
      4 September 2020 @ 23:24
      @Paul - I just wonder if "The Equity Bubble TM" ... or housing bubbles around the world... could be wholly explained by a few dozen hedge funds being enticed into taking on more leverage or opening more margin lending accounts - while Jeff Snider says QE is simply signalling to the finance industry and portfolio managers "You have to get in now! QE is here, so prices wil rise" - and then fund managers - who want any excuse to buy, deploy the funds they already manage.
  • CM
    Cory M.
    4 September 2020 @ 00:37
    Please, no more Cramers (Dave and Tony). Thank you for Roger.
    • BK
      Bruce K.
      4 September 2020 @ 00:58
      Seconded. Roger is ALWAYS fascinating and educational.
    • DF
      Dave F. | Contributor
      4 September 2020 @ 01:20
      Hey Cory....if I read your comment correctly, you are implying that I am somehow in the same 'camp' as Cramer? If that is what you are saying, I find that rather offensive (not in a 'new age wimp' kind of way) but just because Cramer is EXACTLY what this industry does not need. Thought my read was very pragmatic - I hold few opinions, I trade what is. Have a great evening, Dave
    • OM
      Owen M.
      4 September 2020 @ 02:27
      Dave, you are doing a great job and I welcome you anytime on RV. Really appreciate your approach and insight. Tony's and Roger as well. Appreciate you.
    • CM
      Cory M.
      4 September 2020 @ 20:34
      Hi Dave and all, No intent to insult you, Dave. You are a very likable fellow. My concern is that on this platform, it is a distraction to get very short term actionable trades (such as Cramer and many many other s offer) when I come for general learning. Roger offers that and his ideas don't lose their relevance after 48 hours as do the "follow the tape" approaches. Dave, to you, short term is a day trader and intermediate is a few weeks (as you said on the Festival of Learning). That is not a perspective of value for someone seeking a macro platform.
  • CM
    Cory M.
    4 September 2020 @ 01:25
    Ash steps out of his empty elevator to see tumbleweeds blowing over Sutton Place, six shooter not required.
    • RM
      Richard M.
      4 September 2020 @ 13:48
      IDK, with the uptick in crime in NYC a six shooter might come in handy! :-)
  • PB
    Patrick B.
    4 September 2020 @ 12:43
    The right 3 guys on days like this
  • DG
    Dave G.
    4 September 2020 @ 12:23
    Roger sounds like he's long. In the Fed we trust.
  • TS
    Timothy S.
    4 September 2020 @ 00:18
    Expecting higher yields? Excuse me, the world is imploding.
    • DF
      Dave F. | Contributor
      4 September 2020 @ 01:30
      Hey Timothy - we can agree to disagree. However, various repeatable patterns historically argue for higher rates. They may not race 200 bp's higher, but the next meaningful move will be higher rates/lower Note prices in my opinion. Have a great evening.
    • MT
      Mike T.
      4 September 2020 @ 09:45
      @ Dave F. "repeatable patterns argue for higher rates" Can you tell me, and you pick the pattern and time frame of your choice, what is the mathematical/ statistical % probability that your pattern of choice will indeed play out as forecast, or put another way what's the % failure rate of your chosen pattern/s.
  • DR
    Danilo R.
    4 September 2020 @ 02:18
    Sell, sell sell. Robin Hoodies dropping their BitCoin. All I know is the it makes sense to have smaller less correlated trades with tight leashes. Dollar long, TIPS, commodities, EM plays, get off margin and be ultra selective, ignore the FOMO screamers ... you know the ones that go parabolic with bad fundamentals. I am losing my faith on the VIX as a meaningful indicator. Nice spike after the market already tanked. I feel like the only trader that is always a week late in my best researched ideas. I was researching inverse ETFs two weeks ago but my concern of them going to zero and the recent 5 day QQQ rally got me distracted. The reverse ETF idea came from this lousy trader called Tom Basso, lol.
    • MT
      Mike T.
      4 September 2020 @ 09:02
      @ Danilo R. when looking at the VIX it's important to remember it's a forward 30 day index, for 'real time' volatility one has to look at VIX futures e.g. /VX where the front month has been steadly moving UP since Aug 18th.
  • RD
    Riki D.
    3 September 2020 @ 22:53
    RV team. It would be great to hear a debate between the hypothesis discussed in the interview with Brent Johnson and Steven Van Metre, that is QE is not real money that banks can lend out.... and the contratrian traditional view such as Roger alluded to in the interview where he suggested FED prints, gives to Banks, they give to thier shadow market mates to trade the market and that is a significant reason why the market keeps moving up. Thoughts anyone?
    • JL
      Jake L.
      4 September 2020 @ 00:46
      The way I interpret it is, Brent & Steven are correct in that as per the Federal Reserve act the reserves given to banks shouldn’t be fungible. However it does appear that the banks are using these reserves to buy Treasuries & rinse and repeat. This would explain the huge Treasury general account. There are many things that don’t make sense (to me at least) regardless of which view point is correct.
    • RN
      Robert N.
      4 September 2020 @ 08:35
      You might find it interesting to check out George Gammon's presentation of the Johnson/Van Metre thesis and his contrast of that with Alden/Gromen. https://www.youtube.com/watch?v=oLhO7tIAtoY&t=3s I noted that in yesterday's Briefing, Ed seemed to be with Alden/Gromen. It would be good to see a resolution of this.
  • SC
    Sejong C.
    4 September 2020 @ 07:24
    Dave was great in his "technical analysis" series. I missed his input, and this is a timely return. Thanks.
  • DS
    David S.
    4 September 2020 @ 02:21
    Great DB!! Ash, Roger and Dave have great insights!! Bring the DB back behind the paywall. This info should be paid for....yes?
    • JS
      Jon S.
      4 September 2020 @ 06:20
      Is not only for essential?
  • JR
    James R.
    4 September 2020 @ 04:29
    Love the reference to the true definition of decimated! Well done RH.
  • AB
    Alastair B.
    4 September 2020 @ 04:01
    Good luck with the house buying, Roger. Strange times we live in.
  • vk
    vineet k.
    4 September 2020 @ 03:55
    Amzing deep Insight
  • AK
    Alex K.
    4 September 2020 @ 03:33
    Awesome call on silver by Dave the last time he was on RVB.
  • JS
    Jon S.
    4 September 2020 @ 02:01
    Suggestion: Can someone tomorrow refer to the news that China is selling US treasuries massively? Many. Thanks
    • AB
      Alastair B.
      4 September 2020 @ 03:02
      Xi DaDa is making his move
  • IN
    I N.
    4 September 2020 @ 02:57
    Oh, it is so good to have Roger back!
  • MR
    Michael R.
    4 September 2020 @ 02:38
    Every RVDB with Roger Hirst is an instant classic.
  • MC
    Michael C.
    4 September 2020 @ 01:52
    Yesterday and today's interviews were bookends. Interesting take on the 10 yr yield...I see a ST double top whose support broke at 62 bips and measures down to the August low retest around 50 bips quite nicely...;) That March low is lying in the weeds But as the two armed trader...TLT ended where it started (thought bonds would be grabbed in the face of the selloff) and gold actually lost...wouldn't have expected that with yields dropping so much. On the other hand, JPM closed below its previous open and today's open despite an upgrade and the value stock chatter. Ditto KBE. very strange.
    • MC
      Michael C.
      4 September 2020 @ 02:04
      Followup...I thought Roger's comment about when the Fed arsonists/firemen show up to put out the fire (which they started....lol) and save the market was a throwaway but something I hadn't consider. 35% from yesterday's SP500 high is 2332, the gap left from the March bottom gap up. Hmmm
  • GB
    Geoff B.
    4 September 2020 @ 01:51
    Big thumbs up for Roger. Super interesting, clear and understandable. Sometimes the 'superstar' guys are unintelligible, posturing and seemingly playing the 'dramatic lead'. Ash always does a great job facilitating the conversation. Thanks!
  • JS
    Jon S.
    4 September 2020 @ 01:30
    One time a week Dave and Tony. Great idea to have perspective of prop traders. :)
  • AT
    ALAN T.
    4 September 2020 @ 00:50
    Ash you are fantastic at what you do Thanks for your work: you seem so prepared and smart as hell too. I really appreciate Roger's brilliance, but maybe as Raoul once said it's just the accent! (ha!) Trying to put together the Fed pieces; the hot potato metaphor is something John Hussman has referred to re the asset swap between banks and Fed but he also maintains the potato ceases to be hot when the investment landscape is no longer perceived as attractive. Left wondering how much of the Fed effect is Pavlovian. Looking forward to the Jeff Snider interview I'll get to tomorrow.
  • MC
    Michael C.
    4 September 2020 @ 00:03
    I hope everyone notices the (huge +ve) difference between Dave Floyd and other shorter term trader guests who appear on DB. Lots to learn from Dave. Huge thumbs up.
  • sc
    sung c.
    4 September 2020 @ 00:03
    Thumbs up for Roger Hirst interview.
  • DB
    Daniel B.
    3 September 2020 @ 23:10
    I feel like everything Dave Floyd said, was the logic that I have been endoctrined with over the years. I hope we are both not the product of heuristics and bias.
  • RD
    Riki D.
    3 September 2020 @ 22:35
    Awesome two interview Ash. Love the poker face one liner about purchasing stock on an iPhone.. Gold!